BRIAN

E

FROSH

ATTORNEY GENERAL

ELIZABETH

F

HARRIS

CHIEF DEPUTY

AlTORN EY

GENERAL

TH1 RUVENORAN VIGNARAJAH

DEPUTY

ATTORNEY

GENeRAL

THE

ATTORNEY GENERAL OF

MARYLAND

OFFI E OF OUNSEL TO

THE

GENERAL ASSEMBLY

April

1 2015

The Honorable Jay Walker Chair, Prince George's County Delegation Maryland General Assembly 207 House Office Building Annapolis, Maryland 21401 Dear Delegate Walker:

SANDRA

BENSON

BRANTLEY

COUNSEL

TO

THE

GENERAL

ASSEMBLY

KATHR.YN

M.

ROWE.

DEPUTY COUNSEL

JEREMY

M McCoy

ASS

ISTANT

ATTORNEY GIiNERAL

DAVID

W

STAMPER

ASSISTANT ATTORNEY GENER.AL

You asked for advice on behalf of the Prince George's County Delegation relating to a proposal to raise the property tax, the telecommunications tax, and other personal taxes. County leaders have publicly stated that the increases are targeted to fund the county's education budget. Moreover, you indicated that the County Executive stated that the increases can be made without application of the Tax Reform Initiative by Marylanders ( TRIM ), adopted in 1978 and ratified again

in

1996. As explained below, the County Executive

is

correct.

n

1978, Prince George's County adopted Charter Section 812, which provided that a real property tax may not

be

levied in the County that would result in real property tax revenues greater than those collected in Fiscal Year 1979. Section 812(a)(1). This amendment is known as the TRIM Amendment. The limitation was subsequently amended to authorize the Council to levy a real property tax which would result

in

a total collection

of

real property taxes greater than the amount collected in fiscal year 1979 if the real property tax rate does not exceed Two Dollars and forty cents ($2.40) for each One Hundred Dollars ($100.00) of assessed value. Section 812(a)(2). Another charter amendment was approved by County voters in 1996, Section 813. That provision provides, in part, that the County Council shall refer to a referendum of the qualified voters of the County ... any ordinance or resolution levying or charging the amount

of

any tax or fee in excess of the amount levied or charged

in

the preceding fiscal year. Section 813(a).

Question

1.

Whether the General Assembly's authorization in the State Annotated Code that fJllows the Prince George's County Council to levy and modify the levy

of

a

telecommunications tax authorization supercedes the County Charier requirement that such taxes must be approved

y

voter referendum? Answer:

Yes. The Office of Attorney General has consistently advised that the referendum requirement and other charter limitations on the power of a county council to impose taxes does not apply when the council is acting pursuant to an authorization

in

a public general law enacted by the General Assembly. See,

e.g.,

64 Op. Att'y Gen. 35 (197g)(concluding that the TRIM

10

4 LEGISLATIVE

SERVICES

BUILDlI lG .

90

STATE

CIRCLE·

ANNAPOLIS,

MARYUND

214°1 1991

410 946 S600 . 30[ 970 5600 .

P X

410 946 5601 .

TrY

410-946-5-401

.

301-970-5-401

 

The

Honorable Jay

Walker

April

1;

2015

age

Amendment did not apply to property taxes required by public general law for the support of the Maryland National Capital Park and Planning Commission and the Washington Suburban Sanitary Commission because under Maryland Constitution Art. XI-A,

§

3,

the legislative authority of the County is subject to the Constitution and public general laws

of

the State): Letter

of

Advice to the Honorable Marvin

H.

Smith from Ass . AII'y Gen. Richard

E.

Israel, dated November

22,

1995 (advising that public general law which allowed the county governing body to set the income tax rate to between 20% and 60% precluded the application

of

any county limitations or referendum requirements): Letter to Dereck

E.

Davis from Ass ' AII'y Gen. Kathryn M. Rowe, dated May

22,

2007 (advising that charter referendum requirement does not apply when council raised taxes pursuant to authorization

in

public general law). See

also

Maryland Constitution Art. XI-A,

§

1 (charter provisions are "subject only to the Constitution and Public General Laws of this State"). Local Government Article ("LG")

§

20-605(c) states that "[blY ordinance, the County Council for Prince George's County shall impose a sales and use tax on telecommunications service

in

Prince George's County at a rate not less than 5%

.

That section further requires that at least 90% of the net proceeds from the tax be used for operating expenditures

of

the Prince George's County school system and the remainder for payment of debt service

on

bonds issued

by

Prince George's County for school renovation projects approved by the Prince George's County Board of Education and Prince George's County. LG

§

20-605(e). Education funding requirements are mailers of public general law, even when enacted to apply to a single county. 79 Op. Att'y Gen. 132, 134 (1994). Thus, a county ordinance raising the telecommunications tax enacted pursuant to

LG

§

20-605(c)

is

not subject to the County's referendum requirements

of

the County Charter.

Questions: 'Whether Senate Bill

848

of

2012 granted the authority to the governing body

of

Prince George's County to first increase property tax rates above the levels allowed

y

the County Charter?

If

such authority extends

to

allow increases above the levels needed to fund the Maintenance

of

Effort requirements for the County, and

if

the authority

s

granted,

y

what legislative mechanism does Senate Biff

848

allow the governing body to exercise this authOrity?

Chapter 6, Laws

of

Maryland 2012 (Senate Bill 848) made several changes to the local maintenance of effort ("MOE') requirements for education funding. Among the changes were provisions providing that: (1) Notwithstanding any provision

of

a county charter that places a limit

on

that county's property tax rate or revenues and subject to paragraph (2) of this subsection, a county governing body may set a property tax rate that

is

higher than the rate authorized under the county's charter or collect more property tax revenues than the revenues authorized under the county's charter for the sole purpose of funding the approved budget of the county board. (2)

f

the county governing body sets a county property tax rate that is greater than the rate authorized under the county's charter or collects more property tax revenues than the revenues authorized under the county's charter, the county:

 

The Honorable Jay

Walker

April

1,

2015 Page

3 (i) May not reduce funding provided to the county board from any other local revenue source below the funding level in the current county budget; and (ii) Shall appropriate to the county board all property tax revenues exceeding the amount that would have been available if the county charter limitation had applied. Education Article ( ED ),

§

5-104(d). Chapter 6 of 2012 is a public general law. Under Article XI-A,

§

1

tax cap charter prOVisions, like any other charter provisions, are subject to the 'Public General Laws

of

this State.' ... So, too,

by

enactment

of

a general law, the Legislature could override existing tax cap provisions in county charters .

.. It

is clear that the State's laws on public schools are public general laws. 79 Op. Att'y Gen. 132, 133 (1994). Accordingly, as provided

in

ED

§

5-104(d), Prince George's County may raise property taxes for the sole purpose

of

funding education despite limitations

in

the TRIM Amendment or the requirement of approval

by

voter referendum. The increased rate

is

limited to an amount needed for the sole purpose of funding the approved budget of the county board. Moreover, ED

§

5-104(d)(2)(i) provides that the new revenues from the increased property tax rate must supplement other revenue sources in the current budget, not supplant them. According to the County, the Prince George's Board of Education has requested $1,930,930,600,

of

which $763,209,640

is

to come from County

resources

So long as the County shows that the

ex1ra

revenue from the increased tax rate

is

needed to fund the approved budget for the school board and that the funds are

in

addition to other revenue sources

in

the current budget, the County is

in

compliance with the law. I

am

aware of no other legislative mechanism required to pass the tax provisions authorized under State law other than the mechanism provided to the Council

in

its Charter to enact ordinary legislation. Sincerely,

-

l[· ~\

;/

~ l

)CIV-

{

Sandra Benson Brantley Counsel to the General Assembly

http://www.princegeorgescountymd.gov/sitesiCountyCounciIiResources/BudgeUPages/default.aspx. Note that

according

to

the budget request

document.

the

ounty

share

assumes

the education reductions

in

the

Governor s

FY16 budget are not restored.